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RSA axes plans to tap markets for extra cash

GENERAL insurer RSA, which operates the More Than brand in the UK, has abandoned its plans for an ambitious rights issue of around &pound;628m.<br /><br />Chief executive Andy Haste is said to have told its bankers, JP Morgan and Merrill Lynch, to drop the capital raising after his plans to buy out insurance rivals with the proceeds fell apart. <br /><br />Analysts had encouraged the move, which was never formally announced, saying it made sense provided the capital was used to fund a major acquisition to boost RSA&rsquo;s share of the insurance market.<br /><br />News of a possible rights issue initially shocked markets, as the group is seen as one of the best-capitalised insurers with a &pound;1.7bn regulatory surplus. <br /><br />But Haste&rsquo;s intended acquisitions are understood to have made it clear they would fight takeover attempts.<br /><br />Haste was said to have set his sights on the Latin American arm of beleaguered US insurer American Insurance Group.<br /><br />The US giant became a forced seller of several of its subsidiaries after nearing collapse in the credit crunch, with many rivals picking up the units at bargain prices.<br /><br />The list of potential targets also included parts of Dutch group Fortis, it is thought.<br /><br />RSA will now stick to its longer-term strategy of growing through a series of&nbsp; small bolt-on acquisitions. The group has made 25 smaller acquisitions during the last six years.